“Acquiring or Leasing, Financing and Insuring School Facilities”

1

Florida Charter School Conference

Presented by:

Richard Moreno, Executive Director CSSC – Building HopeRolando Llanes, R.A. – Civica

Bill Kelly - EGIS Insurance & Risk Advisors

C I V I C ARolando Llanes, R.A.

“Acquiring or Leasing, Financing and Insuring School Facilities”

Needs Assessment

• Objectives– To communicate the importance of the assessment process

– To clarify the steps involved in needs assessment

– To enable participants to make the various calculations and fill out worksheets relevant to needs assessment

• An estimate of the school’s physical requirements

– Be Flexible– Set short and long term goals

Needs Assessment

• Number of students • Class size estimation• Number of subjects• Number of classrooms• Curriculum-specific classrooms

Lease Variables

• Short or Long Term Lease• Type of lease• Amount of Security Deposit• Tenant Improvements• Guarantee?• Renewal Options

Lease Types

• Gross Lease - the tenant pays a flat rental amount and the landlord pays for all property charges regularly incurred by the ownership

• Single net lease - the tenant is responsible for paying property taxes as well as the base rent.

• Double net lease - the tenant is responsible for property tax and building insurance.

• Triple net lease - is a lease agreement on a property where the tenant agrees to pay all real estate taxes, building insurance, and maintenance on the property. In such a lease, the tenant or lessee is responsible for all costs associated with the repair and maintenance of any common area.

Charter School Facilities

The Road to Municipal Approval

•Mater East Charter School•Mater East Charter High School•International Studies Charter High School•Aspira Downtown Charter School•Aspira South Charter School•Somerset Academy South Dade•Somerset Academy HS @ Silver Palms•Somerset Academy K8 @ Silver Palms•Pinecrest Academy South•Pinecrest Academy West•Pinerest Academy North•Mater Middle / High School•Mater High School Performing Arts Pavilion•Somerset High School Chapel Trail•Gibson International Charter School•Country Palms Charter School•Doral Academy Middle School•Doral Academy High School•Doral Academy High School Expansion•Somerset Academy Davie I•Somerset Academy Davie II•Somerset Academy @ Vizcaya•Mater Gardens Academy•BASE Academy •Mater Lakes Middle / High•Mater Gardens

C I V I C ARolando Llanes, R.A.

Examples of Approval Methods

• Special Exception•Conditional Use Permit

•DIC (MDC)

•Allowed by Right

Processes are Unique to Each Municipality

•Unincorporated Miami-Dade County• City of Hialeah

• City of Coral Gables•Homestead• City of Miami

• City of Hialeah Gardens• City of Miramar

• City of Pembroke Pines• City of Doral

• Village of Palmetto Bay

City of HialeahSec. 98-181. - CUP conditional use permit.

CUP conditional use permit shall be used in connection with uses that are permitted within the zoning district that are deemed to have extraordinary impacts with the surrounding neighborhood or area. The following uses would require a conditional use permit:

i.Private schools, charter schools, vocational and technical schools, and post-secondary education facilities, colleges and universities.

Miami-Dade CountySec. 33-153. - Public hearing required in all districts.

The establishment, expansion or modification of a charter school facility is permitted in any zoning district after public hearing upon demonstration that the standards established in this article have been met. Any existing covenant or declaration of restrictions relating to an existing charter school facility shall be modified or deleted only in accordance with the provisions of Article XXXVI of this code.

City of Miami / New Zoning Code

What Are You?

1002.33 Charter schools.-- (1)  AUTHORIZATION.--Charter schools shall be part of the state's program of public education. All charter schools in Florida are public schools. A charter school may be formed by creating a new school or converting an existing

public school to charter status.

Miami-Dade CountyConsiders Charters Schools as PUBLIC

City of Miami GardensRe-categorized Charter Schools as PRIVATE

Why is This an Important Distinction?

Miami-Dade CountyConsiders Charters Schools as PUBLIC

City of Miami GardensRe-categorized Charter Schools as PRIVATE

Ord. No. 04-108, § 1, 6-8-04) Sec. 33-157. - Physical standards. All charter

school facilities shall meet the minimum requirements included herein.

(a)Outdoor areas. Outdoor recreation/play areas

are not required.

A 500-student station, charter high school in Miami Gardens would require 2.7 additional acres

of land vs. the same school in MDC.

City of Hialeah

Elementary, middle and high schools, post-secondary schools, colleges, vocational or trade schools.

One parking space for each 200 square feet of gross floor area of the floor with the greatest area and one parking space for each 400 square feet of all other floors.

Required Parking Inequality

City of Miami

SREFFaculty and Staff: One space for each member.Visitors: One space per 100 students.High Schools: One space for every 10 students in grades 11 & 12.

Case Study:

•High School•500 students•One Story•40,000 gsf

City of Hialeah

Elementary, middle and high schools, post-secondary schools, colleges, vocational or trade schools.

One parking space for each 200 square feet of gross floor area of the floor with the greatest area and one parking space for each 400 square feet of all other floors.

Required Parking Inequality

City of Miami

SREFFaculty and Staff: One space for each member.Visitors: One space per 100 students.High Schools: One space for every 10 students in grades 11 & 12.

200

120**97

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But Sir, what if a charter school takes over a private school facility that is closing down?

Do I need any kind of special permission for that?

Building &

Fire Codes

Land Use&

ZoningCodes

Size Matters(but so does location)

Urban Sub-Urban

•Building and Fire Codes Establish Maximum Occupancy • Parking Requirements

• Outdoor Play Area Requirements • Traffic Impact

Challenges• Establish a Charter w/ Local District

• Find an Appropriate Site

• Review Local Codes and Ordinances

• Establish Path to Approval

•Consider Site and Building Restrictions

•Then….????

…prepare for an onslaught of democracy.

Insuring Facilities and Contents

Must meet dual requirements

– Lease requirements

– Charter contract

Facilities Types of Coverage

Property Insurance

• Provides coverage for 1st party losses – reimburses for the cost to replace or repair the building and contents.

• Covers fire losses, wind and hail damage, theft, vandalism, etc.

Facilities Types of Coverage

Property Insurance

• Purchase coverage that pays losses at replacement cost not actual cash value.

• Provide the replacement cost values to your agent for both the building and contents.

Facilities Types of Coverage

• Property Insurance –

• Extra Expense? A good idea unless the school has significant undesignated fund balances.

• Flood – Most property polices exclude flood coverage but it is available from NFIP and other sources.

Facilities Types of Coverage

General Liability insurance – provides coverage for liability for injuries and property damage to others as the result of your “negligence.”

Most commonly - playground accidents, trips, slips and falls.

Lease Issues

Most charter schools have triple net leases on their facilities.

They require the charter school to pay for building insurance and they usually specify requirements for general liability coverage as well.

Lease Issues

Some leases require the charter school to insure the building and provide evidence of coverage to the building owner or is agent.

In that case make sure the lease requires the owner to provide the current year plus 3 prior years claims history.

And

Lease Issues

Come to an understanding with the owner about establishing the replacement cost of the building.

Lease Issues

Some leases requires the building owner to purchase property insurance. The cost of which is billed to the charter school.

In that case there needs to be some mechanism for establishing that the premium is the best price for the coverage.

Working with Insurance Agents

Many agents do not have access to all of the available markets (insurance carriers, etc.) So ask potential agents which markets they can get quotes from.

Insurance carriers will only provide a quote to the first agent with a complete submission – applications and claims history.

Working with Insurance Agents

Insuring a charter school is not like insuring your home or car.

The applications, particularly for general liability and professional liability are very technical.

Depending on the time of year the underwriters may take 30 days to respond with a quote.

Working with Insurance Agents

• Ideally find an agent who is committed to service and understands public education.

• The quality of the quote and the premium depend on the quality of the insurance application.

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Florida Charter School Conference

Presented by:

Richard Moreno, Executive Director CSSC – Building Hope

richmoreno6@gmail.com – 954-592-2740 or 954-767-1070

Rolando Llanes, R.A. – Civica llanes@bellsouth.net - (305) 593-9959

Bill Kelly - EGIS Insurance & Risk Advisorsbkelly@egisadvisors.com – (386) 490-1370

C I V I C ARolando Llanes, R.A.